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Ten legal considerations when selling online

There are a number of additional things to consider when selling online as opposed to in a physical store or outlet.  Not an exhaustive list – but here are our top ten legal issues that most business will want to consider:  

1. Register your domain name

Whether you are selling online or physically, you’ll want to consider registering your brand name to make any future enforcement easier. Brands may be protected by several IP rights, primarily trademarks and the tort of passing off, but also copyright and design rights. But, don’t stop there. Make sure you register your domain name as well, especially the “flagship” one. This will again make enforcement easier and will protect you against infringement risks or risks from cyber-squatters who may purchase the domain name with the intention of holding you to ransom.

2. Protect your website infrastructure – some points to consider:

  • Your website development agreement should identify any assignment of intellectual property rights in the website and bespoke software. This should also address your website functionality, accessibility - especially to comply with the Equality Act 2010, security, availability and payment processing if you aren’t using a third party payment provider.
  • Any agreement with a website hosting service provider should include details of the technical specifications, data processing and service levels. If you provide online services to your customers (e.g. a SaaS), the technical data and service levels in the hosting agreement will inform the levels of service that you provide to your customers - for example, you wouldn’t want to commit an uptime percentage without taking into account the uptime commitment of the hosting service providers.
  • If you provide a technical solution to a business that then has authorised users who directly access or use the solution, consider putting in place an end-user licence agreement;
  • If you sell into the EU to EU customers, you must still follow the EU Geo-blocking Regulations rules which prohibit the practice of traders in one country preventing or restricting customers’ access to their online interfaces (e.g. websites and mobile apps) as a result of the customer being from another country (via total block or re-routing);
  • It may be that other websites would like to add a link to your site on their page. You may give your consent for them to do this by way of a linking permission clause in your terms and conditions or by way of a more specific linking licence.
  • If you are using content from third-party sites on your site check to make sure there aren’t any copyright issues (and if others are sharing your content, make sure you are clear on copyright).

3. Check the legals on Apps before you develop:

  1. When developing an App, you should first consider the terms & conditions of the relevant App stores to make sure that you meet their requirements and technical parameters.
  2. The development and supply of an App needs a mobile application development agreement to identify any assignment of the intellectual property rights in the software – make sure you have one.
  3. Additionally, an App that is downloaded or streamed to a user’s device may need a mobile application end-user licence agreement – make sure to check.

4. Put the right information on the website

  • There is some mandatory information that needs to go on your website to comply with the applicable law, this includes at a basic level - a note of your company name, where the company is registered (England & Wales) and its registered number.
  • Terms and policies: see the section on “What do I need on my website” for more details, but you will need to consider including the following on your website:
    1. If you use standard terms and conditions, you should consider how the terms are incorporated properly and at what point a contract is formed with you customers.
    2. You may need to draft some terms & conditions of use to control the access to and the use of your website.
    3. Your terms & conditions must be appropriate for your target customers (businesses, consumers or a mixture). You will need to include a customer’s age to ensure that you are not contracting with minors if you are selling age specific products such as alcohol or tobacco. If you sell to minors then the content of your website must be tailored accordingly to suit the age group and comply with relevant legal requirements such as language and protection measures.

5. Make sure you comply with data rules

If you collect any personal data from the users, then it needs to comply with data protection rules, which may vary depending on the jurisdiction. See the section on “What documents do I need for my website” for further information.

6. Think about what intellectual property you want to protect

Intellectual property rights, such as copyright, trademarks and database rights are found in the content displayed on your site. Accordingly, you may want to notify users of the owner of these rights and this may be done by way of notices. In relation to user-generated content, you may need to draft terms of use of the user-owned content. In some cases, these terms could include a licence of all intellectual property rights in content displayed on your site.

If you provide an auction site or marketplace or other platform, you should consider your liability in the event that your site carries goods that infringe intellectual property rights or are counterfeit.

7. Make sure you know the advertising and marketing rules

There are many rules that will apply to how you market and advertise your products and services. In an online context there are two main areas to be aware of that are unique to trading only (amongst others), including:

  • Data – there are numerous rules around collecting and using data in an online context that may vary by jurisdiction – it’s definitely worth getting some tailored advice here. But, if you plan to collect and use data through your website you must at the very least obtain express consent for example by way of an “opt in” option from users to receive direct marketing material emails when they sign up via a preference or data capture form on your website. Users must also have the choice to opt-out at any point.
  • If you are looking to work with partner websites that will refer users to your site or at advertising using keywords, you should consider carefully the risk of purchasing certain advertising keywords that may give rise to claims for trade mark infringement or tort of passing off. If you embed metatags into your site’s HTML code, you should also carefully select them to avoid trade mark infringement if you use a competitor’s product name to attract searches

8. Check you comply with consumer protection laws when selling directly to consumers

Your terms & conditions and process must be compliant with consumer protection laws and they cannot override pre-existing statutory consumer rights, which should also be present. This includes whether they would be regarded as 'unfair' for consumers, and the requirement for goods to be provided in conformity with your terms.

9. Check whether the Platform for Businesses rules apply to you

If you provide online intermediation services to businesses who sell goods or services to EU consumers, the Platform to Business Regulations may apply to you. These regulations regulate the ability of platforms to abuse their position as an intermediary to impose unfair conditions on their business customers. If you use such a platform or provide one, you would need to ensure that its terms & conditions comply with the rules, including setting out required information and processes such as variation and termination terms, IP/customer data, complaint/ dispute resolution process etc.

10. Monitor social media

You should monitor third-party use of social media for potentially damaging content and infringement of your intellectual property rights. Lack of responsiveness could be a missed opportunity to take down a competitor platform and may lead to reputational damage or lost market share.

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